Help me with a dividend question on VIIIX

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BaylorBears
Posts: 65
Joined: Thu May 02, 2013 11:00 pm

Help me with a dividend question on VIIIX

Post by BaylorBears » Sat Mar 31, 2018 7:45 pm

Quarterly dividend per vanguard’s site is $1.0089

If I have 5,000 shared of VIIiX, wouldn’t that mean my quarterly dividend would be about $5,000 this week?

FrankLUSMC
Posts: 78
Joined: Tue Nov 28, 2017 1:43 pm

Re: Help me with a dividend question on VIIIX

Post by FrankLUSMC » Sat Mar 31, 2018 7:50 pm

yes correct,

the previous dividends were:
Dec 22, 2017 1.237 Dividend
Sep 21, 2017 1.214 Dividend
Jun 22, 2017 0.984 Dividend

sp226
Posts: 11
Joined: Sat May 16, 2015 8:33 am

Re: Help me with a dividend question on VIIIX

Post by sp226 » Sat Mar 31, 2018 7:51 pm

it should...is it not?

TropikThunder
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Joined: Sun Apr 03, 2016 5:41 pm

Re: Help me with a dividend question on VIIIX

Post by TropikThunder » Sat Mar 31, 2018 7:51 pm

BaylorBears wrote:
Sat Mar 31, 2018 7:45 pm
Quarterly dividend per vanguard’s site is $1.0089

If I have 5,000 shared of VIIiX, wouldn’t that mean my quarterly dividend would be about $5,000 this week?
Well, yeah, but that would also mean you have $1,203,200 in that fund.

FrankLUSMC
Posts: 78
Joined: Tue Nov 28, 2017 1:43 pm

Re: Help me with a dividend question on VIIIX

Post by FrankLUSMC » Sat Mar 31, 2018 7:59 pm

TropikThunder wrote:
Sat Mar 31, 2018 7:51 pm
BaylorBears wrote:
Sat Mar 31, 2018 7:45 pm
Quarterly dividend per vanguard’s site is $1.0089

If I have 5,000 shared of VIIiX, wouldn’t that mean my quarterly dividend would be about $5,000 this week?
Well, yeah, but that would also mean you have $1,203,200 in that fund.
Ha HA, and even that isn't enough. Institutional shares require 100,000,000 for minimum purchase! I guess they could be inherited though.

BaylorBears
Posts: 65
Joined: Thu May 02, 2013 11:00 pm

Re: Help me with a dividend question on VIIIX

Post by BaylorBears » Sat Mar 31, 2018 8:02 pm

It’s in a 401k

It hasn’t paid yet due to the timing of the holiday but I’m not expecting it to be $5,000 based on past dividends

I usually just used the % but I started looking at the # of VIIIX shares and the dividend amount and the distribution wasn’t adding up

sp226
Posts: 11
Joined: Sat May 16, 2015 8:33 am

Re: Help me with a dividend question on VIIIX

Post by sp226 » Sat Mar 31, 2018 8:02 pm

FrankLUSMC wrote:
Sat Mar 31, 2018 7:59 pm
TropikThunder wrote:
Sat Mar 31, 2018 7:51 pm
BaylorBears wrote:
Sat Mar 31, 2018 7:45 pm
Quarterly dividend per vanguard’s site is $1.0089

If I have 5,000 shared of VIIiX, wouldn’t that mean my quarterly dividend would be about $5,000 this week?
Well, yeah, but that would also mean you have $1,203,200 in that fund.
Ha HA, and even that isn't enough. Institutional shares require 100,000,000 for minimum purchase! I guess they could be inherited though.
presumably, the institution the OP works for owns the shares...

FrankLUSMC
Posts: 78
Joined: Tue Nov 28, 2017 1:43 pm

Re: Help me with a dividend question on VIIIX

Post by FrankLUSMC » Sat Mar 31, 2018 8:05 pm

Nice!!!

BaylorBears
Posts: 65
Joined: Thu May 02, 2013 11:00 pm

Re: Help me with a dividend question on VIIIX

Post by BaylorBears » Sun Apr 01, 2018 12:10 pm

I’ll have to call the custodian. The share price is listed at $95.98 through their website but $240/share on other sites.

Something not adding up

nolesrule
Posts: 556
Joined: Thu Feb 26, 2015 10:59 am

Re: Help me with a dividend question on VIIIX

Post by nolesrule » Sun Apr 01, 2018 12:47 pm

Your 401k probably holds the investments in a Collective Investment trust, which tends to have its own unit pricing.

ofckrupke
Posts: 393
Joined: Mon Jan 10, 2011 2:26 pm

Re: Help me with a dividend question on VIIIX

Post by ofckrupke » Sun Apr 01, 2018 12:59 pm

BaylorBears wrote:
Sat Mar 31, 2018 7:45 pm
Quarterly dividend per vanguard’s site is $1.0089

If I have 5,000 shared of VIIiX, wouldn’t that mean my quarterly dividend would be about $5,000 this week?
About $5,000, but not "this week". This dividend was recorded on 3/14/18 and paid on 3/16, fifteen days before you posed the question.

BaylorBears
Posts: 65
Joined: Thu May 02, 2013 11:00 pm

Re: Help me with a dividend question on VIIIX

Post by BaylorBears » Mon Apr 02, 2018 8:42 pm

I called the custodian today. They had no explanation and seemed surprised it hadn’t paid yet

BaylorBears
Posts: 65
Joined: Thu May 02, 2013 11:00 pm

Re: Help me with a dividend question on VIIIX

Post by BaylorBears » Sat Apr 14, 2018 7:14 pm

After 6 calls and a couple of escalation emails, the custodian was finally able to tell me they changed the fund. It has no ticker.

Previously it was VIIIX

While VIIIX does pay a dividend, this new ticketless fund does not.

Should I be concerned? Anyone encounter something like this before?

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Rainier
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Re: Help me with a dividend question on VIIIX

Post by Rainier » Sat Apr 14, 2018 8:07 pm

BaylorBears wrote:
Sat Apr 14, 2018 7:14 pm
After 6 calls and a couple of escalation emails, the custodian was finally able to tell me they changed the fund. It has no ticker.

Previously it was VIIIX

While VIIIX does pay a dividend, this new ticketless fund does not.

Should I be concerned? Anyone encounter something like this before?
Yes, and no.

ofckrupke
Posts: 393
Joined: Mon Jan 10, 2011 2:26 pm

Re: Help me with a dividend question on VIIIX

Post by ofckrupke » Sat Apr 14, 2018 8:48 pm

BaylorBears wrote:
Sat Apr 14, 2018 7:14 pm
Should I be concerned? Anyone encounter something like this before?
Probably not.
Have had Vanguard target date institutional share funds replaced in a qualified plan's menu by Vanguard target date collective investment trusts (CITs). Expense ratio went from 0.10% to 0.07%. The income that would otherwise be paid out as dividends just buys more of the underlying asset, so each quarter, each of your shares owns a little bit larger fraction of the total capitalization of all the companies in the tracked index.

In your case, if your plan manager stuck with the Vanguard family, VIIIX would most naturally be replaced by Institutional 500 Index Trust....but since its share price is around $135 it doesn't sound like an exact match to what you now own. So maybe the plan manager switched to BlackRock products?

Nate79
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Location: Portland, OR

Re: Help me with a dividend question on VIIIX

Post by Nate79 » Sat Apr 14, 2018 9:20 pm

It is unusual for funds in a 401k to pay a dividend. There is no reason for them to do so. Likely they switched to a CIT and the dividend is not distributed and instead increases the NAV of the fund.

BaylorBears
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Joined: Thu May 02, 2013 11:00 pm

Re: Help me with a dividend question on VIIIX

Post by BaylorBears » Sun Apr 15, 2018 11:12 am

Nate79 wrote:
Sat Apr 14, 2018 9:20 pm
It is unusual for funds in a 401k to pay a dividend. There is no reason for them to do so. Likely they switched to a CIT and the dividend is not distributed and instead increases the NAV of the fund.
This is what I believe is happening.

So net / net, it's a wash is what I'm thinking.

BaylorBears
Posts: 65
Joined: Thu May 02, 2013 11:00 pm

Re: Help me with a dividend question on VIIIX

Post by BaylorBears » Sun Apr 15, 2018 2:16 pm

Nate79 wrote:
Sat Apr 14, 2018 9:20 pm
It is unusual for funds in a 401k to pay a dividend. There is no reason for them to do so. Likely they switched to a CIT and the dividend is not distributed and instead increases the NAV of the fund.
Did a little more digging. The fund is called "Vanguard Institutional 500 Index Trust" and has an expense ration of .013% - I take that to mean 1.3bips


It states in the prospectus "This investment is not a mutual fund. It is a collective trust available only to tax-qualified plans and their eligible partici
pants"

It makes no mention of dividends or lack thereof in the prospectus.

ofckrupke
Posts: 393
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Re: Help me with a dividend question on VIIIX

Post by ofckrupke » Sun Apr 15, 2018 3:32 pm

BaylorBears wrote:
Sun Apr 15, 2018 2:16 pm
It makes no mention of dividends or lack thereof in the prospectus.
this was covered upthread. In a CIT, income from the underlying assets accretes to each held share rather than being distributed in dividend form.

If you were reinvesting the VIIIX dividends in VIIIX, then your share count grew without regard to further contributions of new money.
In the CIT, your share count does not grow in absence of fresh contributions, but the net asset value per share grows faster than a share of VIIIX, by an amount approximately equal to VIIIX's dividend yield.

If an automatically reinvesting Mutual fund and a CIT both hold the same underlying assets, then the growth rate of any starting amount would be about the same - the difference expected to be comparable to the difference in ER. Possibly the CIT would have a very slight additional edge due to the elimination of the operational expense of dividend accounting.

BaylorBears
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Joined: Thu May 02, 2013 11:00 pm

Re: Help me with a dividend question on VIIIX

Post by BaylorBears » Sun Apr 15, 2018 10:43 pm

ofckrupke wrote:
Sun Apr 15, 2018 3:32 pm
BaylorBears wrote:
Sun Apr 15, 2018 2:16 pm
It makes no mention of dividends or lack thereof in the prospectus.
this was covered upthread. In a CIT, income from the underlying assets accretes to each held share rather than being distributed in dividend form.

If you were reinvesting the VIIIX dividends in VIIIX, then your share count grew without regard to further contributions of new money.
In the CIT, your share count does not grow in absence of fresh contributions, but the net asset value per share grows faster than a share of VIIIX, by an amount approximately equal to VIIIX's dividend yield.

If an automatically reinvesting Mutual fund and a CIT both hold the same underlying assets, then the growth rate of any starting amount would be about the same - the difference expected to be comparable to the difference in ER. Possibly the CIT would have a very slight additional edge due to the elimination of the operational expense of dividend accounting.

Fwiw the CIT fund is about 35% cheaper at .013% vs .02%

ofckrupke
Posts: 393
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Re: Help me with a dividend question on VIIIX

Post by ofckrupke » Sun Apr 15, 2018 11:01 pm

It's 0.007%/year cheaper, which is $7 per $100k, plus any difference in operational efficiency not accountable under the charged ER.
That's like 4 blocks east or west on the atlantic coast to someone in California.

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